Minimum Wage Hike Brings neither Liberty nor Prosperity to New Jersey

The New Jersey Legislature is attempting to increase the minimum wage from $7.25 to $8.25. ? They have approved a constitutional amendment to this effect that will appear in November’s election as a ballot question. ?The question not only increases the minimum wage this one time, it establishes a permanent mechanism in the state constitution to increase the minimum wage on a regular basis.

Read the text of the proposed constitutional amendment here.

Mark Wilson of the Cato Institute explains the negative impact of minimum wage laws and their increases:

While the aim is to help workers, decades of economic research show that minimum wages usually end up harming workers and the broader economy. Minimum wages particularly stifle job opportunities for low-skill workers, youth, and minorities, which are the groups that policymakers are often trying to help with these policies.

David R. Henderson of the Hoover Institution further explains in?The Negative Effects of the Minimum Wage:

Indexing the minimum wage makes it much harder to get the inflation-adjusted minimum wage down and makes it permanently harder for the least-skilled workers to find jobs. The rising minimum wage in France since [1970] has added to the country’s youth-unemployment woes.

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Reduces Other Job Benefits.?Even when minimum-wage increases don’t put low-wage workers out of work, they don’t necessarily help them either. The reason: Employers respond to forced higher wages by adjusting other components of employee compensation, such as health insurance or other benefits. Although few minimum wage workers have employer-provided health insurance, employers have found other ways to adjust, such as cutting on-the-job training. In their study of changes in the minimum wage laws between 1981 and 1991, Neumark and Federal Reserve Board member and economist William Wascher concluded, “[M]inimum wages reduce training aimed at improving skills on the current job, especially formal training.”

New Jersey’s unemployment rate stands at 8.6% as of May 2013. ? This is higher than the national average.? New York is 7.6%, Pennsylvania 7.5%. ? Why would New Jersey want to increase mandates on employers at a time when NJ employers are needed to create jobs? ? Our state has an unemployment rate higher than both the national average and our Tri-State neighbors. ? Mr. Henderson explains:

Imposes an Employer Mandate.?Although economists generally focus on the negative effects of the minimum wage on vulnerable workers, there is another group that also deserves to be considered: employers. How can we justify forcing employers, the very people who are taking risks to provide jobs in the first place, to pay a higher wage? If “society” decides that unskilled people should be paid more, why single out employers rather than, say, taxpayers in general, as the people to pay them?

Only liberty brings prosperity. ? Government planning enriches one group of people at the expense of others. ? There are very few people arguing that New Jersey is lacking in taxes, regulations, and government mandates. ? Our sluggish state economy needs a shot of liberty to improve the employment rate. ? A minimum wage hike will bring neither Liberty nor Prosperity to New Jersey.

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